EUR/NZD Testing 38.2%-50% Fibonacci Resistance on Daily and 1H ChartsEUR/NZD is building a bullish corrective pattern. The bear flag pattern usually indicates a downtrend continuation.
The EUR/NZD is building a bullish corrective pattern. The bear flag pattern usually indicates a downtrend continuation.
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Today’s analysis analyses the EUR/NZD on the daily chart and 1 hour as we examine potential short trade setups.
Price Charts and Technical Analysis
The EUR/NZD seems to be in a strong downtrend. The bearish price swing is expected to be a wave 3 (pink):
- The pullback seems to be an ABC (pink) correction in wave 4 (grey).
- The second breakout below the 21 ema zone could indicate the end of the wave 4 (grey) pullback.
- A break (orange arrow) below the support trend line (green) would be the next confirmation.
- A deeper pullback to the 50% Fibonacci level is expected to act as resistance and a potential reversal.
- A break above the 50% Fib places this wave outlook on hold (orange circle) or invalidates it (red circle).
- The main bearish targets are located at the round levels of 1.6250, 1.60, and the -27.2% Fib target at 1.5860.
On the 1 hour chart, price action seems to be preparing for a bearish breakout but the wave 4 (grey) could extend into a triangle pattern:
- Price action could have completed a bullish ABC (orange) in wave 4 (grey).
- But the wave 4 could also extend sideways via a larger ABC.
- A bullish break above the 50% places the bearish outlook on hold (orange circle) or invalidates it (red circle).
- A bearish breakout (orange arrow) could indicate a downtrend continuation. But a break of the bottom is needed as well later on.
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